Freddie Mac: Short sale process cut in half or more

Freddie Mac: Short sale process cut in half or more

WASHINGTON – Jan. 24, 2013 – Short sales are getting much shorter, Freddie Mac says. The mortgage giant launched a Freddie Mac Standard Short Sale program on Nov. 1 that sought to speed up the short sale process and make it easier and more transparent.

“We estimate that the time to complete a short sale will decrease by approximately 50 percent to 75 percent,” as a result of the changes, writes Tracy Mooney, Freddie Mac’s executive vice president in her recent blog post. “We worked with our regulator, the Federal Housing Finance Agency, to remove obstacles and streamline the process, so we can help more borrowers and reduce costs for the company and taxpayers. The end result is a shorter short sale process that’s long in benefits for borrowers.”

Among the Nov. 1, 2012, changes:

• Mortgage servicers have 30 days to make a decision on a short sale once they receive an application. If they need to negotiate with a third party, they have 30 additional days. A final decision on the short sale must be made within 60 days.

• Mortgage servicers must acknowledge receipt of a short sale application within three days of submission. Servicers must provide weekly status updates if they need more time to review the application past the initial 30-day period.

• Mortgage servicers have the authority to approve short sales when qualifying financial hardships for homeowners who are past due or current on their mortgage payments.

• Mortgage servicers may also approve short sales without a separate review by the mortgage insurance company.

Following a short sale, homeowners may be able to qualify for up to $3,000 in relocation assistance.

Source: “The Shorter Short Sale: Long on Borrower Benefits,” Freddie Mac Executive Perspectives Blog (Jan. 22, 2013)

© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

Related Topics:Short Sales

 

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What is a Wellington Short Sale?

One of the most popular real estate questions I receive is “What is a Wellington Short Sale?” Short sales have existed for a long time, but they did not start becoming common place in Wellington Florida until 2007 to 2008, so it is normal for buyers and even sellers not to know or understand what a Wellington Short Sale is.

A Wellington Short Sale is when a seller owes more on their home than it will sell for in today’s real estate market and they ask their lienholder(s) to accept less than what they owe.
Much like a buyer obtaining financing may have a “loan contingency” a seller will have a “short sale contingency.” So once the Wellington short sale seller accepts an offer it will be contingent on receiving approval from their lienholders in order to sell their home. Some lienholders will agree to accept less and approve the short sale with or without conditions and then there are lienholders who will not approve the short sale.
To find out whether or not the Wellington short sale sellers lienholder(s) are going to approve or deny the short sale could take several months, possibly over a year. If the Wellington short sale is approved the short sale approval letter will give the buyer and seller a deadline to close, which is usually 30-45 days from approval date. Buyers who cannot wait for short sale approval or cannot close when the bank is ready should eliminate Wellington short sales from their home search.
Buying a Wellington short sale can be risky with all of the unknowns, but the only risk short sale buyers often face is the loss of time.
If you are looking for a Wellington short sale agent contact us today for all your short sale needs. Our team assists Wellington short sale sellers along with buyers, educating them every step of the way.

Home Affordable Refinance Program (HARP)

Home Affordable Refinance Program (HARP)

 

Home Affordable Refinance Program (HARP): If you are current on your mortgage and have been unable to obtain a traditional refinance because the value of your home has declined, you may be eligible to refinance through HARP. HARP is designed to help you refinance into a new affordable, more stable mortgage. Click Below for more information.

Home Affordable Refinance Program (HARP)

www.makinghomeaffordable.gov

Act now. Don't delay.

Act now. Don't delay.

Making Home Affordable has real help to offer, but you must contact your mortgage company or a housing expert to take action. The sooner you do, the sooner you can get on the road to financial recovery. Not taking ac...tion can only make things worse. Remember, many Americans have taken the first step towards modifying or refinancing their mortgages, and so should you if you are having trouble making your mortgage payments. There is help available.See More

Making Home Affordable

www.makinghomeaffordable.gov

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9191 NW 3rd Ct CORAL SPRINGS, FL PRICE RIGHT*4/2.5*Shadow Wood*12,986 Lot*Pool*2carGarg
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Rashida McLoryd Remax Consultants Realty I (305) 735-1842 View my other listings

Townhouse*1417 Sq Ft*Garden View*Washer/Dryer in Unit

8955 W Sunrise Blvd PLANTATION, FL Townhouse*1417 Sq Ft*Garden View*Washer/Dryer in Unit
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Rashida McLoryd Remax Consultants Realty I (305) 735-1842 View my other listings

Condo*2004 Yr*Pool*Washer/Dryer in Unit*Fitness Center

533 NE 3rd Ave Apt 246 FORT LAUDERDALE, FL Condo*2004 Yr*Pool*Washer/Dryer in Unit*Fitness Center
1BR/1BA Condo $1,350/month Bedrooms 1 Bathrooms 1 full, 0 partial Sq Footage 800 Parking 1 dedicated Pet Policy No pets Deposit $0 see more photos > ONE OF THE BEST VIEWS IN SOLE..THIS UNIT IS ON THE SECOND FLOOR WITH A VIEW OF THE POOL!!! FRESHLY PAINTED UNIT, (NEW CONDITION) GATED PROPERTY OFFERS STATE OF THE ART FITNESS CENTER, POOL, HOT TUB, WIRELESS INTERNET, BUSINESS CENTER, BILLIARD ROOM..WALKING DISTANCE TO LAS OLAS AND EVERTHING DOWNTOWN FT. LAUDERDALE HAS TO OFFER. WASHER AND DRYER IN UNIT.
Rashida McLoryd Remax Consultants Realty I (954) 336-9593 View my other listings

Avoid Foreclosure: Florida

Avoid Foreclosure: Florida

Don't lose your home! Here is some guidance on default and foreclosure prevention.

Seek Help Early

	Steps to take - act now if you think you will be unable to pay your mortgage
	HUD-approved housing counseling agencies - local agencies that provide FREE foreclosure avoidance counseling
	(888) 995-HOPE - FREE foreclosure prevention counseling on the phone or online
	Florida's Hardest Hit Fund News release
	Free foreclosure prevention workshops - check our calendar for events in your area
	Financial planning resources

Avoid Scams

	Recognizing, Avoiding and Reporting Scams
	Florida Foreclosure Rescue Fraud Prevention Act of 2008 - do not give money to anyone promising to help you avoid foreclosure without a written agreement and until all services are completed!
	Avoid foreclosure rescue scams
	Recognize predatory lending
	Florida Attorney General's Mortgage Fraud Task Force - report fraud, access current investigations, announcements, and tips
	Florida Office of Financial Regulation - check out a financial institution, file a complaint, read consumer alerts and tips

Know the Law

	Florida foreclosure law summary
	Responding to a foreclosure summons and complaint - self-help information from Legal Services of Greater Miami about foreclosure and other topics For the original article Click Here

South Florida Houseing Recovery Rank Among Nation's Best

By Paul Owers, Sun Sentinel

8:04 a.m. EST, January 14, 2013

South Florida was one of the country's hardest-hit housing markets, but now it's among the most improved.
Palm Beach County's median price hit $169,000 in December, a 35 percent annual increase that led the nation, according to a recent report from California brokerage ZipRealty.
Broward County's median price last month was $127,000, a 21 percent jump that ranked ninth nationwide. Miami-Dade County's 20 percent increase was tied for 10th with Sacramento.

Prices also are rising quickly in Phoenix, San Francisco and Las Vegas, the ZipRealty data show.
South Florida homes lost about half their value in the housing crisis, but the market bounced back in a big way in 2012.

Strong demand by investors, a shortage of homes for sale and rising rental rates are contributing to the recovery, real estate brokers say.
Joseph Pucillo, a vice president for ZipRealty, said distressed homes are drawing investor interest partly because lenders are paying owners to complete short sales and leave the properties in good condition.
"Investors are paying $250,000 for homes that would have cost $400,000 a few years ago," Pucillo said. "It's valued very attractively right now. It just makes sense to go there."
Top turnaround markets
Area; Dec 2011 median price; Dec. 2012 median price: Percent change
Palm Beach County $125,000; $169,000; 35 percent
San Francisco-East Bay $275,000; $361,000; 31 percent
Phoenix $120,000; $157,000; 31 percent
San Francisco $592,250; $768,000; 30 percent
Silicon Valley $430,000; $548,500; 28 percent
Las Vegas $109,000; $136,350; 25 percent
Tucson $119,950; $148,689; 24 percent
San. Gabriel Valley, Calif. $203,000; $249,900; 23 percent
San Diego $305,000; $371,000; 22 percent
Broward County $105,000; $127,000; 21 percent
Miami-Dade County $138,000; $165,000; 20 percent
Sacramento $158,225; $190,000; 20 percent


Source: ZipRealty, SunSentinel

Biggest Price Cut of the Day

Approx.24hrs ago, Majestic Properties just reduced the listing price on an 8,149-square-foot, five-bedroom, 6.5-bathroom property located at 2890 NE 28th Street in Fort Lauderdale, Florida from $8.0 million to $6.95 million. This spectacular waterfront home offers 267' seawall with dockage for 75-100' long vessel for boat and watersport enthusiasts. Additional notable features include a rooftopterrace,3 car garage with lifts, smart house technology, private generator,and more. With a price reduction of $1.05 million,  that's what I call a MOTIVATED SELLER. That's my "Cut of the Day" Home for January 11, 2013! Leisa Wade, www.GetLeisa.com

Understanding the FHA Pre-Foreclosure Short Sale Process

Click here to be directed to the informational article

Florida Foreclosure Laws and Statutes | FL

Florida Foreclosure is Judicial.

Notice of Foreclosure

Florida foreclosure begins when the lender files a lawsuit (Lis Pendens) against the homeowner. The homeowners must be notified of the legal action pending and must file an answer within a specified period of time. If the homeowner does not respond, the court will make a judgment against the homeowner and set an auction date.

Notice of Florida Foreclosure Sale

The notice of sale shall include at least the following information,:
The name, address and telephone number of the person to contact for information regarding the real estate, the address of the property, a legal description of the property, a description of the improvements, the time and place of sale, the times specified in the judgment, the case title, number, and court which the foreclosure was filed, and terms of the sale
Florida foreclosure law states that the notice of sale shall be published at least 3 consecutive weeks, the last such notice not less than 5 days prior to the sale.

Florida Foreclosure Auction

Foreclosure auctions in Florida typically take place 30 days after judgment is filed, at 11:00 am on the county courthouse steps. Winning bidder is required to have 5% down and the balance is due by the end of the day. Upon payment in full of the amount bid, the person conducting the sale shall issue a Certificate of Sale and give to the purchaser.

Redemption Period

Florida foreclosure law states that the homeowner has the right to redeem the property anytime before the day of the sale. After the Certificate of Sale has been issued, there is no right of redemption.

Click Here to Read More

Top 20 Frequently Asked Questions on Florida Short Sales and Foreclosures

A short sale and foreclosure expert compiled the top 20 frequently asked questions from buyers and sellers considering a short sale in Florida. A new website is launched to explain the process and where to turn for help. The site contains relevant news stories, live news feeds and helpful links for buyers and sellers.

• 

Florida Foreclosure Assistance

A lot of sellers don't know where to turn for help and this compelled me to put together the website Florida Foreclosure Assistance.

Palm Beach, FL (Vocus/PRWEB) December 14, 2010

Kevin Dickenson is a Palm Beach real estate agent with Prudential Florida Realty and an expert in Florida foreclosures and short sales. Mr. Dickenson is in the top two percent of 64,000 Prudential realtors nationally and has compiled the top 20 most frequently asked questions from buyers and sellers considering a short sale.

1. Are foreclosure websites like RealtyTrac accurate?

"I signed up a month to try it out and discovered that homes listed under the bank owned category were often nothing more than contractor or HOA liens," said Dickenson. "The data is seriously flawed in my opinion."

2. What is a short sale?

A short sale occurs when a borrower owes more than the home is worth and submits a request to the lender for a discounted payoff.

3. What is a lis pendens?

A lender will file a lis pendens (lawsuit) against a borrower typically after 3 months of non-payment. When the suit is filed, the borrower is now in the “pre-foreclosure” phase.

4. What is the best way to buy a Florida foreclosure?

If the home is listed on the MLS, find a good realtor who knows the process and use him as your guide. If the home isn't listed on the MLS, the borrower will need to be contacted because they are in control of the property until the home is foreclosed. Keep in mind that borrowers in default may be very difficult to get in touch with.

5. Can a buyer contact the bank to buy the home after the lis pendens is filed?

Only the deed holder has the authority to sell the home prior to a final judgment of foreclosure. The lender will not talk to any third party unless the borrower has given the individual written authorization. Another option is for the lender to sell the note, but most banks don't want to be bothered with a single small transaction.

6. Is the bank obligated to accept the contract price agreed to?

No. If an owner accepts a short sale offer, the contract MUST be contingent upon the lenders agreement to a discounted payoff and there is absolutely NO guarantee the lender will agree. The lender will hire a real estate agent or appraiser to perform a "broker price opionion" (BPO) to determine fair market value. Be prepared for a counter from the lender if the offer price is low.

7. What does the borrower need to supply to qualify for a short sale?

The bank will require a lot more documentation to discount the loan compared to what was supplied to obtain the loan. The lender will typically request two years tax returns, the last 3 pay stubs, a financial statement, four months of bank statements and a hardship letter as a minimum. Banks employ forensic accountants to make sure the borrower is in true financial hardship and keep in mind that a lot of people borrowed money for homes they couldn’t afford using no-doc stated income loans. A borrower who misrepresented income may refuse to provide the required documentation if it proves fraud. The buyers contract should contain a right to cancel clause if the seller fails to submit a complete short sale package to the lender within 10 days.

8. The offer and short sale package was submitted over four months ago and we haven't received a response. What’s going on?

Banks are overloaded with short sale requests. If a lis pendens has not been filed, the file is at the bottom of the banks pile. If a final judgment of foreclosure has been filed, this means a court date has been set and the home will be sold at auction in less than 30 days. In this case, the file is at the top of the pile. If the lis pendens is filed, it's in the pipeline and the buyer should be prepared to wait at least 4 months. A good negotiator should follow up with a buyer every two weeks and buyers will need to be patient.

9. Can a Seller accept more than one short sale offer and submit it to the bank?

The owner can accept a backup offer, but the new Florida FAR/BAR short sale addendum does not allow the seller to submit backup offers to the bank until the contract in first position is cancelled. Make sure your agent is using the most recent contract package and have an attorney review all documents.

10. Who is taking care of the house during the four to twelve months the buyer is waiting for the bank to approve aFlorida short sale?

Nobody. Typically, the seller has vacated, the power is off and there is a good chance mold is growing in the home. The pool will turn green and black algae will burrow into the finish. Be prepared for the seller to strip the appliances, ceiling fans and light fixtures. Even worse, some owners will destroy the home out of anger. Make sure the contract provides a right of cancellation.

Click Here For More Information

REAL ESTATE

The perils of buying a foreclosed home online

 

It could go fine. Or the ex-mayor could live in the property and refuse to vacate, as happened to Billy Makedonsky.

Buy Photo

Billy Makedonsky purchased a home in El Portal at 181 NW 87th Street but the occupant, former El Portal mayor Joyce Davis, won't move out. Makedonsky is shown Friday, December 28, 2012 at a friend's house in North Miami Beach where he is staying a few days a week. 

CHUCK FADELY / MIAMI HERALD STAFF

BY DAVID SMILEY

DSMILEY@MIAMIHERALD.COM

Billy Makedonsky thought he’d found the perfect retirement home for his 75-year-old mother. Better yet, buying it required just a few mouse clicks.

His only concern about the bank-owned house with the terracotta driveway and barrel-tiled roof — other than the fact he’d never bought a home online before — was this caveat on GoHoming, the site auctioning off the property as is: “Please DO NOT DISTURB the occupant.”

Turns out he had good reason to be worried.

For $159,000, what Makedonsky got was a house wrapped up in multiple bankruptcies, foreclosed in protested proceedings, and shrouded by allegations of fraud. The home is also the residence of El Portal’s former mayor, Joyce A. Davis, who said she wasn’t about to leave it in the middle of her comeback campaign.

“There were signs up all over El Portal: ‘Elect Joyce Davis for Mayor,’ and she was squatting in my home,” marveled Makedonsky, a 41-year-old flight attendant.

Makedonsky’s tale is just one buyer-beware among many in the digital age, when reams of distressed and bank-owned properties are added daily to online auction sites, making the business of vulturing real estate cheaper and more accessible. The flipside: Establishing clear title and control of the home, which some cash buyers have never set foot in, can mean sorting through a thicket of foreclosure filings, fraud allegations, bankruptcies, other mortgages, association liens, creditors and combative tenants.

“People don’t realize there’s a lot more to it than ponying up some money,” said Dennis Donet, a Miami foreclosure defense attorney.

Makedonsky’s adventure began in August, when his mother gave him permission to spend her nest egg on the house just around the corner from Horace Mann Middle School despite warnings on the private site GoHoming, now called HubZu.com, that someone was still living there.

Worried that “occupant” was a real estate euphemism for “crack heads,” Makedonsky drove to the Northeast Dade village of El Portal and knocked on the door. He was relieved to find not some strung-out vagrant, but Davis, El Portal’s 69-year-old former mayor.

So he bought the house, thinking he would offer Davis $1,000 to leave, a transaction known in the business as “cash for keys.”

“She didn’t go for it,” said Makedonsky, who sued in October to evict her.

Davis says in court filings that she is a widow living on a fixed income with nowhere else to go, that she is the victim of fraud, and that Makedonsky’s claims that she is squatting are bogus.

“I don’t care what he’s calling me, that doesn’t make it true,” said Davis, who ultimately lost the Nov. 6 election to Mayor Daisy Black, netting just 18 percent of the vote.

Davis, who was El Portal’s vice mayor from 2004 to 2008 and then mayor until 2010, has so far been successful in fending off Makedonsky’s eviction attempts.

Makedonsky received a judgment for removal of tenant from Judge Shelley Kravitz on Nov. 13. The next day, Davis filed for protection based on her ongoing bankruptcy case, which can halt eviction proceedings. Her motion was dismissed, but Davis filed an emergency motion Nov. 27 saying she was the victim of fraud.

Kravitz then issued a stay, putting things on hold pending the results of a hearing scheduled for Tuesday.

Click Here to read more.

Read more here: http://www.miamiherald.com/2013/01/05/3169510/the-perils-of-buying-a-foreclosure.html#storylink=cpy

Short Sale Option As An Alternative To Foreclosure : Fannie Mae

 

Overview:

What is a Short Sale?

A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds. You may also be eligible for the government’s Home Affordable Foreclosure Alternatives Program (HAFA) which offers short sale and DIL options.
A short sale is an alternative to foreclosure and may be an option if:

• You are ineligible to refinance or modify your mortgage
• You are facing a long-term hardship
• You are behind on your mortgage payments
• You owe more on your home than it’s worth
• You have not been able to sell your home at a price that covers what you still owe on your mortgage
• You can no longer afford your home and are ready or need to leave

For more info Click Here

Completed Foreclosures Down 18% from Year Ago: CoreLogic

Fewer homes were added to foreclosure inventory in November as short sales become a more commonly used tool to prevent foreclosure, according to a recent CoreLogic report.

Data from CoreLogic revealed 55,000 homes were lost to foreclosure in November. The figure represents an 18 percent decrease from November 2011 and a 6 percent decrease from October’s upwardly revised 59,000.
“The pace of completed foreclosures has significantly improved over a year ago as short sales gain popularity as a disposition method,” said Mark Fleming, chief economist for CoreLogic, in a release. “Additionally, the inventory of foreclosed properties continues to decline while the housing market demonstrates an ongoing ability to absorb the distressed sales that result from completed foreclosures.”

Although foreclosure inventory is shrinking, the number of completed foreclosures is still high compared to pre-crises levels.
Before the housing market decline in 2007, CoreLogic noted completed foreclosures averaged 21,000 per month between 2000 and 2006. Since September 2008, about 4 million homes have been lost to foreclosure, according to CoreLogic.
The states that saw the highest number of completed foreclosures in a one-year period ending in November 2012 were California (102,000), Florida (94,000), Michigan (75,000), Texas (58,000) and Georgia (52,000). The five states alone account for half of all completed foreclosures.
The state with the highest foreclosure inventory rate as a percentage was Florida, which led with a rate of 10.4 percent. New Jersey’s foreclosure inventory rate of 7.3 percent gave it the second highest ranking. Other states in the top five were New York (5.1 percent), Nevada (4.7 percent), and Illinois (4.7 percent).
Two metros with notably high foreclosure inventory rates were found in Florida. Tampa had a rate of 10.9 percent and Orlando a rate of 10.5 percent.
Other metros with a high percentage of inventory in foreclosure included Nassau-Suffolk, New York (6.7 percent); Edison-New Brunswick, New Jersey (6.1 percent); New York (5.6 percent); and Chicago (5.6 percent).

Article from: http://www.dsnews.com/articles/completed-foreclosures-down-18-from-year-ago-2013-01-03

Miami Short Sales Now In Reach of Homeowners with Perfect Payment History

Miami Short Sales Now in Reach of Homeowners with Perfect Payment History

Posted on October 29, 2012 by EdLucas

As of November 1^st of this year, new guidelines from Fannie Mae and Freddie Mac will allow Miami homeowners experiencing financial hardship to qualify for short sales even if they have never missed a mortgage payment. Previously an unblemished payment history would have disqualified homeowners from the possibility of obtaining a short sale. The need to prove substantial hardship is still required but this change will allow many Miami homeowners to qualify for a short sale that would not have been possible before the new rules took effect.
In addition to this much needed change officials of the FHFA (Federal Housing Finance Agency) report that they are currently “in discussions with the credit industry” to find ways to preserve the credit rating of those homeowners whom undergo a short sale but also have never missed a mortgage payment in the past.

For more check out http://miamishortsale.info/

Chase Short Sale FAQs

Frequently Asked Questions

Selling your home for less than you owe

How do I start the process?

First, submit your request now to find out if you are eligible to sell your home for less than you owe and avoid foreclosure.
Next, start your search for a real estate agent as soon as possible. Look for an agent who has experience working with mortgage companies on home sales. If you have trouble finding a real estate agent, you can call us for help finding an agent to list and sell your home quickly.
Once you have found a real estate agent, send us your listing agreement and we will help you list your home at a price that's comparable to similar homes for sale in your neighborhood – even if the price is less than what you owe on your mortgage.

Are there any other benefits to this program?

You may be eligible for the government's Home Affordable Foreclosure Alternatives (HAFA) program, or other programs that provide additional options and financial incentives to avoid foreclosure.
If you qualify to sell your home for less than you owe through the HAFA program, you may receive financial assistance to help with relocation

For More Short Sale FAQ's answered by Chase bank click here: https://www.chase.com/chf/mortgage/hrm_shortsale

HAFA short sale rules may help sellers

By Michele Lerner • Bankrate.com

Highlights

• Home Affordable Foreclosure Alternatives program changes rules.
• Borrowers, lenders incentivized to avoid foreclosure.
• Predefined steps intended to speed and facilitate short sale process.

Homeowners struggling to sell their homes in a short sale are getting some relief, thanks to the federal government's Home Affordable Foreclosure Alternatives, or HAFA, program.
Up to now, many short sales -- in which the lender accepts a sale of the property for less than the full amount owed -- have taken months to complete. Sometimes, the complex and lengthy process has failed, resulting in foreclosure.

HAFA establishes streamlined short sale rules and incentivizes borrowers and lenders to work together to avoid foreclosure. The rules -- in effect between April 5, 2010, and Dec. 31, 2012 -- also are intended to speed up the short sale process.
"The streamlined short sales process will definitely help homeowners," says David Liniger, Re/Max International chairman and co-founder.
Prior to HAFA, homeowners often listed their home for sale without an idea of what the lender would accept.
"A lot of sellers and their Realtors have not been able to sort out the problems with short sales and have given up on the process because, even after sending in the correct paperwork, they have sometimes waited three or four months for their lender to respond," Liniger says.
Under HAFA, borrowers receive preapproved short sale terms from the lender prior to putting the home on the market.
Lisa Matykiewicz, a Realtor and Certified Distressed Property Expert in Gilbert, Ariz., says the updated short sale rules establish an easy-to-understand process with predefined steps that "make it easier for everyone to understand."

Eligibility requirements

The HAFA guidelines apply to lenders who voluntarily participate in the HAMP program. The Department of Housing and Urban Development says more than 100 servicers have signed up to participate in HAMP, covering more than 89 percent of mortgage debt outstanding in the country.
To be eligible for HAFA, homeowners must first apply for a loan modification through the Home Affordable Modification Program, or HAMP. Owners who do not qualify for a loan modification or miss payments during the initial loan modification period qualify for HAFA.

Other HAFA requirements include:

• Property is principal residence.
• Mortgage originated before Jan. 1, 2009.
• Mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.
• Borrower is delinquent or default is foreseeable.
• Homeowner demonstrates hardship.
• Borrower's total monthly housing payment exceeds 31 percent of gross income.
• Unpaid principal does not exceed $729,750

According to HAFA rules, lenders now must offer a short sale in writing to the borrower within 30 days if the borrower does not qualify for or complete a loan modification. Borrowers then must respond within 14 days to the lender's short sale agreement.

"I think it's great that the lenders in this program have to offer a short sale before going to foreclosure," Matykiewicz says.
When a purchase offer is made, borrowers must submit the sales contract to the lender within three days, along with the buyers' mortgage preapproval and the status of negotiations with other lien holders on the seller's property.
Finally, lenders must approve or deny the contract within 10 days.
HAFA rules also state that lenders must release borrowers from the obligation to repay the difference between the sales price and the loan amount. No deficiency judgments are allowed for a first or second loan.

Other incentives

In the past, short sales were especially difficult for homeowners with more than one loan on their home, since the home sale typically repaid only the first mortgage. HAFA's financial incentives include a payment of up to $3,000 for second mortgage holders.
"Second trust lien holders are often owed five or 10 times that $3,000 payment," says Liniger. "But if the property goes to foreclosure, the second trust holder is not likely to get any money at all. This at least guarantees they get something."
Other HAFA financial incentives include $1,000 to loan servicers to cover administrative fees, up to $1,000 for mortgage investors who agree to share short sale proceeds with second lien holders and $1,500 to the homeowners for relocation.
"The moving expense allocation acts as an incentive for them to stay in the property until the short sale goes through," says Liniger. "Owner-occupied properties are usually in better condition than vacant homes."


Read more: http://www.bankrate.com/finance/real-estate/hafa-short-sale-rules-may-help-sellers-1.aspx#ixzz2GvkYtnE7
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